Buying shares at undervalue

by **Nonimous** on Mon Nov 07, 2011 1:50 pm

Company A has previously done some work for Company B

Company A has therefore been allowed to buy shares in Company B at the same price as the comapny's EMI offer to its staff.

Obviously when and if Company A sells, it will need to pay tax on what may be a large gain. But are there other tax considerations?

by **Incredulum** on Mon Nov 07, 2011 2:52 pm

This is consideration for a barter transaction?

So Company A books turnover at the full value of the shares, notwithstanding the price paid?

by **Nonimous** on Mon Nov 07, 2011 2:59 pm

No, company A has previously invoiced and been paid for the actual work

by **Incredulum** on Mon Nov 07, 2011 4:18 pm

Nonimous wrote:Company A has therefore been allowed to buy shares in Company B

I guess it all turns on what you mean by "therefore". I do not understand why there should be a "therefore". It all seems somewhat unlikely that B is bestowing gratuitous benefit on A. Why may I not buy some too?

No relationship between Company A and any employees/relations/shareholders/other interested parties in B?